I’m getting close to the end of soybean harvest. Every year my goal is to be done soybeans by Halloween, but that doesn’t necessarily always happen. Needless to say, when the American election rolls around in November usually I am picking corn. The day after I can often remember delivering corn to an end-user with my tractor radio crackling with the commentary of the new President. Well, we’re getting close to that now. That must mean that I’m about to shell some corn.
Of course I will leave that up to my American friends who they elect. It is been a very entertaining election season for Canadians because we have a professional entertainer in Donald Trump controlling the media cycle. He has done that from the beginning against his Republican opponents. When in earlier times, even Americans wouldn’t tune into the early debates, his presence has meant an entertaining election season. The ratings for the American media outlets have been off the chart reflecting this new political phenomenon.
Whoever the Americans elect, our Canadian Prime Minister has promised to work with. So, if anything, that shows that Prime Minister Justin Trudeau is just like any other Canadian Prime Minister. The Americans are our best friends and biggest trading partners. We don’t comment on their business, we just want more of it.
So I was a bit interested the other day when I read a piece for the CBC written by Don Pittis, a twitter follower of mine. Don wrote a piece about the Canadian economy not performing at a level we would like to see and that is one reason that the Bank of Canada governor (and my lost twin brother) Stephen Poloz kept interest rates the same this past week. Simply but, Canadians have to do better boosting our own economy but we we’re also in a bit of a holding pattern until we see who was elected American President.
According to Poloz, poorer than expected Canadian exports combined with low business investment in the US has affected the Canadian economy in a negative way. For instance, investments decisions have been delayed, some till after the American election partly because of the stands of the candidates on trade and monetary policy. From a Canadian perspective, I think we all know what “America first” means. It means that whatever the United States deems is good for them is good for everybody, especially Canada. So when we hear presidential candidate Donald Trump say those types of things, there is a collective chill in some investment plans.
It’s that way also of course because if we have another President Clinton, she has been affected by the political discourse we’ve seen over the last 12 months. She has gone to the left because of Bernie Sanders but also has been affected by the populism of Donald Trump and his “America first” campaign. So, from a Canadian perspective when it comes to softwood lumber exports or any type of agricultural exports, it is a nervous time. We know our American friends always get what they want and during this election season Canadian commodities sometimes get caught up in the crossfire.
Interestingly enough, Poloz had a few other things to say which were good. For instance, he said that oil investment had actually bottomed out. In other words, it was a bit of a backhanded complement as it meant it wasn’t going to get any worse than it already is. Similarly, he said that we had not regained our export capacity lost during the long oil and resource boom when the Canadian dollar was high. This has been hard to rebuild and I think especially for the oil sector you could understand why. From an agricultural perspective, I don’t think it’s so difficult. The lower Canadian dollar has helped farmers a lot.
As many of you know, I find the Canadian Bank of Canada Governor job so intriguing. Could you imagine me doing that? It is so delicious that I have a body double in that role now. Regardless, my lost twin brother has a responsibility of guiding the levers of the economy going ahead. For Canadian agriculture that is extremely important. He leaves no doubt that key to our Canadian economic future is increased economic growth in the United States in 2017. So when Donald Trump said recently in the last presidential debate that he’d like to see 4% economic growth in the United States this coming year, I can concur. However, in our developed economies, that’s not so easy.
So as we move ahead, I can only see good things post US election regardless who wins. It is likely in my estimation that much uncertainty will disappear, investments decisions will pick up and we may even see renewed American economic growth in 2017 and 2018. What that will mean to Canada is increased prosperity, increased economic growth and hopefully many more agricultural export opportunities. We just have to get by Election Day November 8th.